Like Follow Follow Seguir

HOME SUBSCRIBE JOIN CSCMP SUBMISSIONS NEWSLETTERS MEDIA FILE CONTACT

Logistics
FINANCE GLOBAL LOGISTICS MANUFACTURING PROCUREMENT TECHNOLOGY CURRENT ISSUE ARCHIVES VIDEO WEBCASTS WHITE PAPERS

January 07, 2017 | 9:38 PM

LOGISTICS

What do we really mean by supply chain management?

By Leif Enarsson | From the Quarter 1 2009 issue

15 28 0 Comments

In this brief excerpt from his book, Future Logistics Challenges, Leif Enarsson of Sweden's
Gothenburg University wonders why after all these years we still haven't arrived at a common
definition of supply chain management.

Over the years many buzzwords have emerged in the field of logistics, with "supply chain management" (SCM) and all
its variants being the most common examples. There is nothing new in these terms. Logistics management is still a
developing discipline, and natural development over time does not equate to truly new concepts.

Nevertheless, researchers continue to discuss and debate the meaning of the term supply chain management. Every
new book about logistics, it seems, contains another definition of SCM. To me this is an absurd situation, because there
Supply Chain Executive Insight E-Newsletter
is nothing truly new, even if we do give it a new name or definition.
Each month the Supply Chain Executive Insight
According to the academics Lambert and Stock1 and others, the definition of supply chain management is much e-newsletter will include brief articles about
developments that are often overlooked by other supply
broader than that of logistics. This is a common argument. For example, the Council of Logistics Management (CLM)
chain publications. We will present you with summaries
(now the Council of Supply Chain Management Professionals) revised the definition of logistics in 1998:
of the latest research as well as new ideas on how to
make your supply chain operations more effective. And
Logistics is that part of the supply chain process that plans, implements, and controls the efficient,
we'll offer commentary that sheds light on what's
effective flow and storage of goods, services, and related information from the point-of-origin to the
happening in supply chains today.
pointof- consumption in order to meet customers' requirements.
Sign up now!

Lambert, Cooper, and Pagh offered the following definition that same year2:

Supply chain management is the integration of key business processes from end user through original
suppliers that provide products, services, and information that add value for customers and other
stakeholders.

That definition covers most business activities. Christopher's definition3 is more customer-focused:

The management of upstream and downstream relationships with suppliers and customers to deliver
superior customer value at less cost to the supply chain as a whole.

The standpoint that logistics management is more internal than supply chain management strikes me as somewhat
strange given that integration between different players has always been fundamental to logistics management.

To illustrate how the definition and concept of supply chain management have multiplied, consider that in 1999, 30
papers were presented at a conference, resulting in at least 20 different variations on the SCM theme.4 These included:

• Supply chain network Most Read Articles

• Supply management
1. 10 best practices you should be doing now
• Capacity-based supply chain
2. Supply chain strategies: Which one hits the mark?
• Supply chain dynamics
• Networkwide supply chain 3. 7 ways everyone can cut supply chain costs

• Lean supply chain 4. From bean to cup: How Starbucks transformed its supply
chain
• Supply network
5. Relationships for supply chain success
• Web supply chain
6. Six steps to successful supply chain collaboration
• Supply demand
• Seamless supply chain 7. Supply chain segmentation: 10 steps to greater profits

• Supply integration 8. The real impact of high transportation costs

• Demand chain 9. What do we really mean by supply chain management?
• Information management 10. The economic impact of e-commerce
 • Supply coalitions

Similarly Day, Burnett, and Forrester5 found that the term "supply chain management" was frequently used but the
concept had inherited a multiplicity of meanings—in other words, there were disagreements about what definition best
describes SCM. They also found that literature surveys create more confusion than general agreement on a definition.

Here are some examples of how fragmented the definitions have been. Olsen and Ellram's definition6 had a broad
discussion about the "buyer-supplier relationship." New7 argued that supply chain management crosses boundaries
between operations and industrial economics, marketing, economic geography, and industrial sociology. (Under that
description, supply chain management includes nearly everything in business—hardly a meaningful definition.)

Another definition was that of Mattsson,8 who said the supply chain consisted of a line of actors who are in a dependent
relationship with one other, and through which material, payment, and information flow. But this could also be seen as
a traditional defi- nition of logistics.

SCM is what you make of it

All of these variations and the lack of clarity in the definition lead to the conclusion that SCM is what you make of it; in
other words, it can involve anything, depending on the situation. In that view, it is hardly a new theory, nor is it a new
scientific field.

Leaving aside the discussion of the proper definition of SCM and its relationship to logistics for a moment, let's look
more closely at the concept itself and its possible advantages. The supply chain concept extends to include a focus on
production and involves both the supply and distribution sides of the company. As the chain expands, the distance
between the manufacturer and the end consumer increases, both geographically and from an operational point of view.
At the same time, there is a strong trend toward more and more customer-oriented products and production, which
requires close relationships between suppliers and customers.

This trend points out the need for a form of supply chain or, more generally, a system for integration and closer
relationships. But is the "supply chain" concept the solution to this challenge? A chain of companies is only a part of a
whole, complex system. There has to be a focus on all of the relationships and the dependencies, which is a big
challenge indeed.

Currently, SCM research is dominated by information technology (IT)-related projects that often involve IT-based
modeling and simulation. As a result, SCM consultants and researchers are building models in one limited field, often
without a deeper knowledge of established theory, practical usefulness, economic benefits, or the effects of their
developments on the system as a whole.
News from our sister publication
In today's world, businesses are shaped by complexity, fast-changing conditions, and constant development. This
causes instability in many respects, but is this situation really new? Have not people in all periods of history thought
that their own times were more dynamic and more changeable than any before them? Today, however, we can better
predict change than we could in the past. This means that we can control development and that the rate of development
Kane Is Able will operate DC for Dow Building Solutions
is low today compared to previous periods.

Radiant Logistics to acquire Lomas Logistics

Companies are trying to respond to dynamic developments and complexity, striving to achieve stability and to carry out
operations more efficiently. The goal of IT development, to a great extent, is to create a better (which often means GE opens wallet to boost 3-D printing
simpler and easier) way to conduct business.
Toyota names winners of grants to study supply chain tech
In this dynamic world, we create new theories and new concepts such as supply chain management. What are the
criteria for the new theories, and how are new conceptions related to them? Sometimes it seems that the degree of Maersk, Alibaba in agreement allowing liner's customers to
book space using Alibaba's site
popularity—how often it is used, mentioned, or referred to—is the determining factor.

What kind of chain?

If we want to keep the "chain" concept, then the most appropriate name might be "value chain." But in some respects, it
would be more correct to call the supply chain the "demand chain." One important reason is that demands for more
effective support often come from customers. A discussion about supply and demand, moreover, leads to the conclusion
that all actors in the supply chain can be seen both as customers and suppliers, depending on the position from which
you view the chain. Regardless of the viewpoint, the end of the chain is always the final customer.

If we treat the supply chain as a theory, we can compare it with other theories and draw some conclusions. For instance,
the marketing channel theory focuses on the distribution and demand side of a company; it can be argued that this is
only part of the chain, but this depends on where the company is situated in the chain. The value chain primarily
focuses on internal activities and physical flows, so that support activities are related to external activities. In
comparison with supply chains, the value chain pays very little attention to information systems. The network theory
considers the whole network, its actors, activities, and relationships. The supply chain is only one part of a network, and
therefore it only gives us one part of the entirety. Finally, the business logistics theory includes the whole material flow
and the different activities within it. Business logistics does not focus on integration and the information system in the
same way that the supply chain concept does. In logistics, information systems are natural and necessary tools for
managing the flow in all its aspects; it is not the major management focus that it is in the supply chain theory.

It is quite possible to compare and find differences between the supply chain concept and established concepts. Yet isn't
the supply chain concept a result of striving for new ideas—ideas that contain very little in the way of substantial new
facts? In fact, we could just as well call supply chain management "cash flow management" or "information
management."
It should be obvious to anyone that I have a reserved attitude towards new concepts, and in my logistics research world,
I believe that this is a healthy approach.

Endnotes:
1. Douglas M. Lambert and James R. Stock, Fundamentals of Logistics Management (New York: McGraw-Hill, 1993).

2. Douglas M. Lambert, Martha C. Cooper, and Janus D. Pagh, "Supply Chain Management: Implementation Issues
and Research Opportunities." The International Journal of Logistics and Management (1998).

3. Martin Christopher, Logistics and Supply Chain Management. (London: Prentice Hall, 1998)

4. Leif Enarsson, "Supply Chain Management: Just a Simple System, or a Determining Solution?" Paper given at the
15th International Conference on Production Research, University of Limerick, Ireland (1999).

5. Marc Day, John Burnett, and Paul Forrester, "Assessing Control Sspects in U.K. Ceramic Tableware Supply Chain."
Paper presented at the 15th International Conference on Production Research, University of Limerick, Ireland (1999).

6. Rasmus F. Olsen and Lisa M. Ellram, "Buyer-Supplier Relationships: Alternative Research Approaches," European
Journal of Purchasing & Supply Management (1997).

7. Steve New, "Supply Chains: Some Doubts." Paper presented at the International Purchasing and Supply Education
and Research Association, Cardiff, United Kingdom (1994).

8. Stig-Arne Mattsson, "Effective Material Flow in Supply Chains Through Integration." Paper presented at the
Federation of European Production and Industrial Management Societies (FEPIMS) Conference, Helsinki, Finland
(1998).

Editor's Note: This article is an edited excerpt from Future Logistics Challenges, (ISBN 9788763001700). The book
can be purchased for UK �36, US $64, or EUR 53. For more information, go to International Specialized Book Services
(www.isbs.com) or visit the Copenhagen Business School Press web site, www.cbspress.dk. Reprinted by permission of
the publisher.

Leif Enarsson is senior lecturer in transportation and logistics at the Gothenburg University School of Business and Commercial
Law in Sweden.

Forecast Pro 10 best practices Replenishment+ Supply chain

Software you should be... for NetSuite segmentation:...

Ad forecastpro.com supplychainquarterly.com Ad intuiflow.com supplychainquarterly.com

Supply Chain Six steps to Supply chain 7 ways everyone

Quality successful... strategies:... can cut supply...

Ad qitconsulting.com supplychainquarterly.com supplychainquarterly.com supplychainquarterly.com

JOIN THE DISCUSSION

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.
0 Comments CSCMP's Supply Chain Quarterly 
1 Login

 Recommend 7 ⤤ Share Sort by Best

Start the discussion…

Be the first to comment.

ALSO ON CSCMP'S SUPPLY CHAIN QUARTERLY

Drones in the supply chain: more than New CSCMP publication explains
just last-mile delivery "blockchain" technology
2 comments • 4 months ago• 1 comment • 6 months ago•
Flying Solutions.com — We are developing www.essaywriteronline.com — I perceived
supply chain solutions with drones and that, the five-page paper gives a decent
looking for pioneering partners to put … prologue to the innovation and …

From Desert Storm to the retail store: Unwitting accomplices

Five technologies that are closing … 1 comment • 9 months ago•
1 comment • a year ago• avanbodegraven — I've been looking to
Vekia FR — Regarding the point 4: meet up with some unsavory characters,
Predictive analytics, you should see our but no luck, so far. But, for the innocent, …
company VEKIA which creates and …

✉ Subscribe d Add Disqus to your site Add Disqus Add 🔒 Privacy

Want more articles like this? Sign up for a free subscription to Supply Chain Executive
Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends
and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an
e-mail to editor@supplychainquarterly.com . We will publish selected readers' comments in future issues of CSCMP's
Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

More Logistics Articles

◾ Multitasking DCs deliver the goods for omnichannel retailers
(Quarter 4 2016)
◾ Best-in-class retailers have greater supply chain visibility than
peers (Quarter 4 2016)
◾ Early holiday shoppers have highest expectations for order
fulfillment (Quarter 0)
◾ Smart-packaging market to reach $26.7 billion by 2024
(Quarter 4 2016)

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.

Copyright © 2017 CSCMP's Supply Chain Quarterly, a publication of Supply Chain Media, LLC. All rights reserved.
HOME | SUBSCRIBE | MEDIA FILE | CONTACT US | STAFF LIST
CSCMP's Supply Chain Quarterly, Tower Square, Number 4, 500 E. Washington St., North Attleboro, MA 02760
CSCMP's Supply Chain Quarterly is published by Supply Chain Media LLC, a joint venture of CSCMP and AGiLE Business Media LLC. The
views and opinions expressed in articles appearing in CSCMP's Supply Chain Quarterly are the authors' and do not necessarily reflect those of
the Council of Supply Chain Management Professionals or of Supply Chain Media LLC.